How to Exit Your Advisory Firm, according to George Washington
DEAR ADVISORS,
Whether or not you’ve watched the Broadway musical, Hamilton, released on Disney Plus this summer, we can all appreciate learning from our founding fathers. One scene from Hamilton especially stood out to me. When George Washington relinquished his Presidency, he showed us how to exit gracefully and endorse the next generation. This was unheard-of at the time. He set a precedent for nations around the world to establish democratic governments to allow better leaders to serve their people. Here you can see a video of this scene performed at the White House at the end of President Obama’s term. Today I want to share with you the 3 character traits Washington exhibited in this scene, and how to apply them to improve your advisory firm’s exit plan.
Humility is a prerequisite for a successful succession plan.
In his Farewell Address, Washington asked the American people for forgiveness for his many unintentional errors. What a brilliant example of humility! Many advisors who are solo practitioners lose the habit of humbly soliciting feedback and improving themselves as leaders. Failure to see and correct your weaknesses makes it difficult to bring on a younger advisor or build a team. Prideful advisors will struggle to hand over their advisory firm to the next generation. Acknowledging that you will not always be the right leader for your advisory firm takes humility.
As Washington said in his Farewell Address, “Though, in reviewing the incidents of my administration, I am unconscious of intentional error, I am nevertheless too sensible of my defects not to think it probable that I may have committed many errors. Whatever they may be, I fervently beseech the Almighty to avert or mitigate the evils to which they may tend. I shall also carry with me the hope that my country will never cease to view them with indulgence; and that, after forty five years of my life dedicated to its service with an upright zeal, the faults of incompetent abilities will be consigned to oblivion, as myself must soon be to the mansions of rest.”
The opposite of humility was King George III in the musical. You know a leader lacks humility when he says that he wasn’t aware that yielding power was something a person could do! That seems to be a problem in our financial advisory industry as well. When advisors think they’re going to live forever, and don’t put an exit plan in place, it becomes an issue of pride.
Thankfulness shapes your team’s culture during a transition.
Washington expressed both definitions of thankfulness - pleased and relieved. It’s important to express gratitude to your team, for everything you’ve accomplished and built together. Thankfulness is a tool to bring your team together when working on the many extra projects that arise during a business transition. It’s also a relief to transfer the responsibility of running the advisory firm to your younger counterparts. Expressing gratitude to the younger advisors for stepping into leadership roles instills confidence. It also helps exiting advisors mentally prepare to enjoy resting in retirement and re-define their success in this next chapter.
As Washington said in his Farewell Address, “I anticipate with pleasing expectation that retreat in which I promise myself to realize, without alloy, the sweet enjoyment of partaking, in the midst of my fellow-citizens, the benign influence of good laws under a free government, the ever-favorite object of my heart. ...In looking forward to the moment which is intended to terminate the career of my public life, my feelings do not permit me to suspend the deep acknowledgment of that debt of gratitude which I owe to my beloved country for the many honors it has conferred upon me; still more for the steadfast confidence with which it has supported me; and for the opportunities I have thence enjoyed of manifesting my inviolable attachment, by services faithful and persevering, though in usefulness unequal to my zeal.”
Trust creates a stable foundation for the next generation to lead.
One of the primary goals of Washington’s Farewell Address was to warn against dangers America would face, like political in-fighting and wars with other nations. In an advisory firm there are many similar dangers, like drama within the team and inevitable market fluctuations. When you talk about your succession plan, you want to impart a sense of confidence and unity to your clients and your team. You must trust and believe in the next generation to care for your legacy so they can believe in themselves and lead the firm effectively.
As Washington said in his Farewell Address, “The unity of government which constitutes you one people is also now dear to you. It is justly so, for it is a main pillar in the edifice of your real independence, the support of your tranquility at home, your peace abroad; of your safety; of your prosperity; of that very liberty which you so highly prize. But as it is easy to foresee that, from different causes and from different quarters, much pains will be taken, many artifices employed to weaken in your minds the conviction of this truth; as this is the point in your political fortress against which the batteries of internal and external enemies will be most constantly and actively (though often covertly and insidiously) directed, it is of infinite moment that you should properly estimate the immense value of your national union to your collective and individual happiness; that you should cherish a cordial, habitual, and immovable attachment to it.”
As you think about a succession plan for your firm, what will your legacy be? Consider drafting your own Farewell Address to celebrate what has been most meaningful to you, share your wisdom, and paint a picture of hope in the future of your firm.
If you haven’t watched Hamilton yet, then cancel your meetings for the day and go watch it because it will change your life! (Pro tip - watch it with subtitles on because it’s very fast-paced.) George Washington is a compelling example of a humble, thankful, trusting leader. His decision to relinquish his Presidency is an example we all can learn from, to secure the future of our financial advisory firms for generations to come!
Warm regards,
Brooklyn
P.S.
At Ellevate Advisors, we believe that advisors deserve to retire too. What does that look like for you, your family, and your business? Let’s figure it out together! Click here to schedule an initial phone call with our team today or get to know me on my bio here!